Fri, Dec 03, 2010 - Page 11 News List

Spain moving to stem bailout fears with privatizations

AFP, MADRID

Spain, battling to douse market fears of an Irish-style bailout, on Wednesday unveiled plans to raise billions of euros through the partial privatization of the state lottery company and the sale of a bigger stake in its airport operator.

Spanish Prime Minister Jose Luis Rodriguez Zapatero also announced his Socialist government would scrap a monthly subsidy to unemployed workers and would cut taxes for 40,000 small and medium sized firms to help spur growth.

“There will be other measures to encourage economic activity,” he told parliament.

Zapatero will skip the Dec. 3-4 Ibero-American summit in Argentina and an official visit to Bolivia scheduled for Dec. 2 to attend a Cabinet meeting today where the new measures will be approved, a government official said.

The privatizations of airport management company AENA and of state-run Loterias y Apuestas del Estado could net the government around 14 billion euros (US$18 billion), the online edition of business daily Cinco Dias reported citing unnamed government sources.

Spanish Deputy Prime Minister Alfredo Perez Rubalcaba said they would help to “reduce debt and provide more room for maneuver in the budget.”

The Spanish government has slashed spending to rein in a public deficit that hit 11.1 percent of GDP last year, the third highest in the eurozone after Greece and Ireland.

European Commission spokesman Amadeu Altafaj said the measures “confirm the government’s determination to continue with its reform agenda.”

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